Case Studies

Cloud Solutions using Open Source Software 

The Situation

A unicorn was moving into new markets.

It was to service the open source community with online tools available to developers to parse source code, for:

• presence of open source software and applications
• outdated versions of open source software packages, which would lead to potential security issues and malware attacks, and
• other code checking and verification services.

Corporate counsel wanted guidance on use of structure of deployment of their own developed software. Had they crossed the line on the terms of use of open source software and the packages which were to be used?

Deployment models of open source software can be borderline when it comes to compliance. Some step well over the line. Also, serious legal issues can arise with deployment of OSS and combining it with proprietary software.

Could proprietary software used by the company be dragged into coverage by GPL licences?

Process

We received a brief from the technical staff to explain the deployment model used for their own proprietary codebases, which was JavaScript based. It was important to know what the codebase talked to, and how.

With that we were in a position to have an informed conversation with corporate counsel.

Outcome

We modelled the use cases and explained where the concerns should lie, what to look out for.

With, that corporate counsel was able to better consider their own contracts and open source software to better utilise open source software for their own business in the wild.

They keep their risk profile minimised.

The client gained a baseline understanding of where legal problems might arise and deal with them internally.

Corporate Counsel was also set up to move towards future commercial ventures with a clear understanding of the to-dos and the not to-dos.

Competitive ventures are now more within reach with fewer unknowns, and without proprietary codebases at risk of disclosure under GPL licences.

Rogue Director seizes control of Company

The technical director in a three director business felt disenfranchised and seized control of the IT infrastructure of the business.

All staff were locked out of the business’s computer systems and the business was effectively held to ransom. The rogue director had convinced himself that he was acting in best interests of the business.

Solicitors had been retained. Their discomfort with the technical nature of the underlying subject matter led to inaction.

The director continued to retain control of the IT infrastructure of the business.

Month end was approaching.

Invoices could not be issued. Cashflow would be frozen issued if the directors continued to be locked out of the IT infrastructure and all of its systems.

One thing was expected to lead to another … customers would become aware that there was a serious problem within the business.

The rogue director could not be persuaded to alter their behaviour.

The company was being brought to its knees.

Assessment

The company had about two weeks to correct the situation.

The court system clogged up in the local area where proceedings had been commenced.

A way to obtain the relief required, and on coherent grounds to obtain it in one hearing before a judge.

The client was advised to apply for court order requiring the rogue director to deliver up control of the systems.

There was also the risk that if the rogue director caught wind of the application, client data might well be deleted.

When push comes to shove, there are little few places to hide when it comes to gathering together and presenting relevant technical evidence and communicate underlying technical concepts to judges, to justify making urgent injunctions requiring compliance by wrongdoers.

Outcome

Urgent applications were made to High Court.

Forensic experts were coordinated with datacentre staff to gain access to systems. Essentially, experts were engaged to hack the company’s security systems, to secure them before the injunction obtained from a High Court Judge was presented to the rogue director.

The rogue director was ordered to stay away from the business assets and systems subject to further order of the court.  Had the director done so, the dispute he would have to answer to the court for contempt of a court order requiring him not to.

The business could then resume trading as usual until the dispute was resolved.

 

Boutique Information Technology Consultancy

The Situation

A seasoned boutique information technology consultancy supplied, delivered and supported IT services to businesses.

The consultancy services national customers in the entertainment business. Those business have high demands for streaming services at their premises dotted throughout the country.

Everything revolved around streaming services to large audiences and payment services, every day of the year other than Easter and Christmas Day.

The demands on the business from customer to customer vary, and might include:

• one-off projects, such as technology refreshment and replacement of obsolete IT systems to current industry standards
• procuring, installing and configuring high capacity network communications (many Gbits)
• maintaining operational effectiveness of real-time streaming services locally to mass audiences at multiple venues simultaneously
• accommodating established technologies users were accustomed to using for their businesses.

These are sort of systems which need to be stable and have high tolerance under load: and reliable enough to do it day-in, day-out without constant monitoring.

The contract which was being used had been developed over years, with tweak, after tweak after tweak. It blew out into in incoherent mass of words, which was difficult for new customers to read and in places lacked coherency from a legal perspective.

Assessment

Focus had been lost on what had was important, from a legal and contractual perspective.

This led to a situation where the contract provided for micro-instances of events which would not likely reoccur in other contracts, added to the weight and complexity of of the drafting.

It took days to prepare contracts with specifications for jobs, to make sure the solution proposed was accurate, with the appropriate dependencies and qualifications to delivery. Suppliers usually count on the cooperation of customers to deliver on time and to specification, and it was especially important with

• online payment processing on a mass scale
• implementation of technology solutions for audiences with disabilities with special needs to enjoy streamed entertainment

Projects usually fell into different types of work: one off projects, ongoing support and maintenance, structured support levels.

Benefits

We helped the business remodel the way they presented their contracts. The legal obligations of each party were standardised and balanced out so that the contract was a reflection of the high-quality mass market businesses the company supported, and the quality of managed services required for continuous uninterrupted delivery to the paying public.

A reusable contract was produced specifically for the business to handle each of the different combinations of project work taken on by the business.

Outcome

We introduced a contractual structure that met the client requirements in the way that the non-technical staff of the ultimate customer could readily and understand, and wanted to read them. 

The structured contract produced resulted in an average reduction of 30% of the time to produce drafts by senior management. The negotiation time reduced with the presentation of the contract, with reduced sales meetings and change requests to the terms proposed reduced.

The business had a better focus on doing the work which earns revenue and less on administrative work required to convert potential customers to new customers. The conversion rate on new business also increased.

Also, the contract is used as an active tool in negotiations to assess the attitude of the client, what they will be like to work with. The questions arising from the draft serve as a barometer to future trouble, which gives a better realisation of whether the business is better off not having the work or the client.

SaaS Solution for Enterprises 

The Situation

The client business was established a long time software developer who worked with a series of large corporates. He broke away to start his own business with a SaaS solution with the next level application for concierge level management of corporate events for global enterprises.

Premier brands were being signed up for the service. The business was expanding.

He had a friend who was a solicitor at a medium-sized law firm. The solicitor put together a contract for the business at low cost.

In negotiations, they were being swamped with change requests.

Tough ones. Some of them were legally technical amendments.  Ones where you need to be a skilled and experienced solicitor to work out:

• what the changes would mean to the business's risk profile, and
• worse still, the difference with what we proposed in the first place

Each change request raised a series of difficult questions:

• What would it mean for the business if those amendments were accepted?
• How would it impact on the rest of the agreement?
• Do we start doing something differently for this particular client? 
• Does it really help us to have a different contract for each client with these change requests?

Too much executive time was being consumed on change requests.  They were generating waves of requests for changes.

Assessment

The contract was too complicated.

The exception handling was unbearable for the business. The contract put up barriers to getting new businesses done.

The contract was too highly strung for the sort of business they were in, and who their customer base.

Large global corporates would expect a premium service. They needed to get their contracts right: right for their business, and not someone else’s.

Also, inhouse counsel struggled with change requests.  They weren’t accustomed to the legal issues and the options in technology oriented contracts. They couldn’t see the wood for the trees.

The needed to speed up sales process and reduce objections to terms of contract.

Outcome

They came to us with a contract that a lawyer would be proud of. We rewrote the contract. Now they have a standard starting point for new business which was more commercially acceptable.

They left with an agreement that business could understand, negotiate and stand by.

The lawyers for the global corporates stopped making so many change requests.

The client no longer needed long internal meetings, with drawn out meetings with the global corporates.

They’ve dispensed with:

• the need to read – and re-read – a highly technical legal document over and again for contract review meetings. They didn’t need to be a lawyer or a layperson with 10 hours of dedicated, uninterrupted focussed time to understand each version of the contract.
• being dictated terms by their customers

They have:

• a professional corporate feel to their contracts, which is consistent with their brand, and the way they do business
• an understanding of negotiating points, and when accepting a change request would take them too far into the wilderness

Also, the legal issues which arise with change requests are clearer. Corporate counsel can better focus on risk assessment for directors on other things. They can tell the difference between one set of terms and another, without the time investment.

Negotiations reduced down to vanishing point. 

Clients are onboarding faster.

Fixing One-Sided High Risk Contracts

Background

The client built an online visual media delivery solution for industrial scale streaming to massive UK-wide audiences.  

It received attention in the right circles, and was introduced to national broadcasters.

Opportunities started arriving, commercial negotiations followed. Draft contracts were presented.

The commercial negotiations reached a point where a single instance of a SaaS solution would be provided for a limited period of time: a single SaaS instance of the solution. The client would maintain it within infrastructure hosted by the customer.

Assessment

The contract presented to our client said something quite different to the deal which had been negotiated in meetings. 

The contract been drafted to enable to the customer to use the software for the same price and compete with the developer. It wasn't a SaaS Agreement, it was a SaaS Agreement with widely drawn software licences which would enable the customer to do things such as:

• take the potential customer base away from the client
• create instances of the SaaS solution itself, and make them available to their own customers on their own, without requiring further payment to the client
• offer the same services to their own customers on better terms that what the client could offer them

The contracts were complicated, one-sided, over 50 pages and over-lawyered. And the customer requested comments and feedback within days.

Fixes

The client was supplied a negotiating strategy to rein in the more disadvantageous terms, and reduce the breath of the permissions to use and exploit the solution to their own customers. 

Provisions were added to require the customer to be contractually required to do their bit so the understanding between the parties was a closer match to the commercial reality.

The client ended up with a more evenly balanced contract on the terms which were originally agreed in commercial negotiations.